Prenatal nicotine exposure impairs normal lung development and leads to diminished pulmonary function after birth. Previous work from our laboratory has demonstrated that nicotine alters lung development by affecting a non-neuronal cholinergic autocrine loop that is expressed in lung. Bronchial epithelial cells (BEC) express choline acetyltransferase, the choline high-affinity transporter, and nicotinic acetylcholine receptor (nAChR) subunits. We now demonstrate through a combination of morphological and electrophysiological techniques that nicotine affects this autocrine loop by upregulating and activating cholinergic signaling. RT-PCR showed the expression of 3, 4, 7, 9, 10, 2 and 4 nAChR mRNAs in rhesus monkey lung and cultured BEC. The expression of 7, 4 and 2 nAChR was confirmed by immunofluorescence in the cultured BEC and lung. The electrophysiological characteristics of nAChR in BECs were determined using whole cell patch-clamp on cultured BEC cells. Both acetylcholine (ACh) and nicotine evoked an inward current with a rapid desensitizing current. Nicotine induced inward currents in a concentration-dependent manner with an EC50 of 26.7 µM. Nicotine-induced currents were reversible blocked by the nicotinic antagonists mecamylamine, DHE and methyllcaconitine. Incubation of BEC with nicotine (1µM) for 48h enhanced nicotine-induced currents by ~26%. The protein tyrosine phosphorylation inhibitor, genistein increased nicotine-induced currents by 58% and enhanced methyllcaconitine-sensitive currents (7 nAChR activities) 2.3 fold, whereas the protein tyrosine phosphatase inhibitor, pervanadate, decreased effects of nicotine. These results demonstrate that chronic nicotine exposure upregulates nAChR activity in developing lung and that nAChR activity can be further modified by tyrosine phosphorylation.